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Challenges 2014: Win-Wins Affect Interests, Can They Effect Economic Transformation?

30-10-2013

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 +++ ECDPM Challenges blog series. Post number three  +++

Will 2014 Be a Year of Implementation?

If 2014 is to be a year in which we see genuine moves towards economic transformation it will likely rely less on the international agenda than domestic politics and how these interact with global economic processes.

Economic transformation will only take place when governments and the private sector can align interests to make partnerships work. Otherwise, we are unlikely to see much progress in 2014.
 
 
 
 
 

 

 

 

 

 

We Have a Busy Agenda Ahead of Us….

On-going discussions on the post-2015 agenda will offer opportunities for further promoting the economic transformation agenda, with attempts to not only “deliver” through the private sector but also engage the private sector in policy design. Partly in response to the disappointment of MDG8, the role of the private sector in development is increasingly apparent.

Other highlights may be the April deadline for agreement on the EAC-COMESA-SADC Tripartite Free Trade Area, an ambitious trade agreement intended to overcome the challenges of multiple and overlapping memberships of countries and further push the regional integration agenda. With the AfDB’s next annual report to be released in 2014 under the title “Leveraging Regional Integration for Inclusive Growth”, regional integration clearly remains an important economic policy issue, at least at a political level.

The Domestic Agenda for Transformation is Growing

Investment flows to Africa have brought renewed emphasis on the need for investment and policy reforms to promote value addition and productive employment, increasing internal pressure on governments to deliver on this, and a growing focus on engaging with the domestic and international private sector to achieve equitable and sustainable growth.
 
The October deadline for the conclusion of economic partnership agreements (EPAs) should hopefully be an opportunity to agree at regional levels on development-oriented FTAs with the EU, that will further boost domestic agenda for economic transformation. Failure to reach regional agreements will have long lasting negative effects on regional integration dynamics, should some countries break away from the regional position, and will undoubtedly sour the relations between Africa and Europe.

2014 will surely also see follow-up actions from the 2013 conference of African Ministers of Economy and Finance which adopted an agenda including the promotion of private sector entrepreneurship development for sustainable employment and economic empowerment of women; access to renewable energy, promotion of green industries, energy efficiency production, capacity building and long-term financing for African industrialisation and finally an appraisal of the Accelerated Industrial Development of Africa (AIDA).

The “state of implementation of agreed priorities” is perhaps the main challenge for economic transformation in relation to the post-2015 framework, the tripartite FTA or promoting industrial change. 
 
 
The Ubiquitous Win-Win
 

Western donors are also lining up to work with their own private sectors for development through partnerships and instruments that essentially subsidise foreign investment. Not long ago, the UK’s development Minister Justine Greening laid out her 3 priorities for promoting development: lowering barriers to trade and investment, promoting entrepreneurs and business people in developing countries, and “Thirdly and critically, I believe it also means greater investment by business, and I want to see UK companies joining the development push.”

She is not alone among European donors. The recently launched Dutch foreign policy document entitled “A World to Gain” defines three types of relationships to be pursued: ‘aid relationships’, guided by altruism for fragile and post-conflict states; ‘trade relationships’ with other wealthy countries, following Dutch commercial interests; and an in-between ‘transition relationship’ category, linking aid and commercial policies and to be guided by “enlightened self interest”. Transition countries by this definition include Mozambique, for example. The Danish are the latest to join the fray with the launch ten days ago of their  “Opportunity Africa” which will aim to “combine traditional foreign policy, development co-operation as well as trade and investment”. 
 
 
A Need to Harness Interests

 

While international and continent-wide policies and donor strategies may provide an important framework for development discourse, any genuine economic transformation is likely to rely less on an international agenda than domestic politics and policies and how these interact with global economic processes.

The views expressed here are those of the author, and may not necessarily represent those of ECDPM.

 

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Economic Transformation and TradeBusiness and DevelopmentRegional IntegrationThe Role of the Private Sector in Agriculture and Food SecurityTrade Policy and Economic Partnership AgreementsChallengesCommon Market for Eastern and Southern Africa (COMESA)EU-Africa Summit 2014East African Community (EAC)Economic Partnership Agreements (EPAs)Free Trade Area (FTA)Post 2015Private Sector Development (PSD)Private sectorRegional fundsSouthern African Development Community (SADC)AfricaEurope